Europe’s largest arms manufacturer BAE Systems is to ensure ethical business
conduct and management of reputation risk is assessed in all future audit
reports.

This was one of the key recommendations made by Lord Woolf in his 150-page
report into the defence company’s conduct.

BAE chairman, Dick Olver controversially called for the Serious Fraud Office
to resume its investigation into its £43bn arms deal with Saudi Arabia claiming
a review of the case would show there was little chance of success.

Woolf made 23 recommendations which included developing and publishing a code
of ethical business conduct, scrapping facilitation payments and keeping a
register of money spent on gifts and hospitality.

Mike Turner, BAE chief executive said: ‘We will carefully study the report’s
contents to understand the detail of its conclusions and remain committed to
acting on all the committee’s recommendations.’

The company pledged it would give more detailed feedback on the report, which
cost £1.7 million to research, and associated actions by the end of July.